When buying a house, something we should know before venturing into it are the different types of mortgages that the market offers us and how we have to ask for them in the banking entities. It is very important that you know, before ordering them, what are the characteristics of these products, as well as the advantages and disadvantages of this type of mortgage.
Financing of preferred housing is possible when accessing a mortgage, but this can be a complex process. It is important to save to cover mortgage expenses and down payments that can be greater than 25 percent. Expenses such as notary, property registration and appraisal payments must be provided in the mortgage.
Before negotiating a mortgage it is important to know what are the requirements that must be met in order for it to be approved. It is a priority to fill the conditions such as the ability to pay, which is less than 40% of income. Advance the requirements that demonstrate economic stability, such as proof of work and monthly income of applicants.
You should keep in mind that one of the most important things you will do throughout your life, is to sign for a mortgage and you must know everything related to them. Apart from that you should try to be as informed as you can about prices and appraisals in order not to have any future problems.
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Given how complicated it is and the number of things that should be taken into account in mortgages, we wanted to teach you to know everything you need to know about them. You should know the characteristics of each mortgage, as well as the offers that banks offer.
Term Mortgages
These types of mortgages are the most popular product in this market and are likely to be one of the first offered to you so that your interest rate does not change over the years; This means that the same amount of money must be paid for as long as we have the mortgage. Since it has many facilities, it is a type of mortgage that is having more and more people every year. These types of loans with fixed interest are also much shorter with the passage of time, since they must only be paid around 20 years, unlike normal mortgages that can be up to 40 years.
Variable Rate Mortgage
The variable rate mortgage is another of the best-known mortgages. In this case, the fees that must be paid on a monthly basis vary based on the mortgage reference.
If we take a look at the lists of mortgages in this country, most mortgages correspond to this type of variable mortgage, being only 7% fixed interest.
Mixed type mortgages
In mixed-type mortgages, both interest rates must be known, since both are combined with each other. In this case, the fixed and variable interest rate causes the mortgage interest to vary based on the Euribor reference or through a fixed interest that you can agree with the bank with which you will obtain the mortgage. The different mortgages according to the type of instalment they present
In addition to the interest rate, when you get a mortgage with your trusted bank you must know the mortgages by the type of fee. These are the main mortgages according to the type of instalment that should be known. You should think ahead when choosing the one that best suits you, in addition to assessing your current situation. If you are not sure what type of mortgage payment you should acquire, you can contact your trusted bank that may recommend the best option.
Types of mortgage and the advantages of each
Fixed-rate mortgage
One of the most demanded mortgages by people looking to get a mortgage loan is fixed-rate mortgages. In this type of mortgage, monthly payments are based on one part of interest and another part of interest requested. When you start paying this type of mortgage, the interest is very high, however, over time, the monthly amount to be paid goes down, based on the amortization of capital.
After many years, the situation is completely reversed and people end up paying a very small amount, in addition to having most of the mortgage already paid.
Mortgages with locked fees
These locked instalment mortgages are another type of highly demanded mortgages but a little more complicated to obtain. In this type of instalments, it should be borne in mind that the same amount of interest will always be paid, regardless of what happens to the interests externally or the changes in the economy. However, it has a negative part and it is that based on changes in external interest, the amount of fees that must be paid if they change.
Mortgages with final instalment
On the other hand, the mortgages with final instalment are mortgages in which a part of the capital that is requested to pay in the last instalment of the loan remains. This amount is given based on 30%. These types of mortgages are not as popular, since a large final disbursement is required in the last instalment that, if we do not have that money can cause us delinquency problems or we can even lose the house if we do not have the amount established.
Increasing instalment mortgages
In the mortgages of increasing quota, it should be taken into account that the percentage grows as the years go by and also increases as there are changes in interest rates. It is a type of mortgage credit that people avoid since it does not have many benefits, but many expenses.
Mortgages only interest
These types of mortgages are very little known within Spain although they are carried out by people who come from other countries to this. Here, only interest is paid every month and nothing is lowered from the total amount of the house; However, once they are completed every month you must pay the full amount of capital or you can choose to sell the house in order to pay such debt.
Here at Conveyancing in Melbourne we offer all the services related to assistance required for the process of buying a new property. Contact us if you require property conveyancing in Melbourne.